Florida residents enrolled in Obamacare will have to cough up more money to keep their plans.
Recent data shows that premium rates and deductibles for the Affordable Care Act (ACA) Silver Plan will be rising significantly due to the ACA reinsurance and risk corridor programs expiring at the end of the year. Without the subsidy programs, insurance premiums alone will have to cover medical expenses for the first time in 2017.
As a result, insurance providers offering Obamacare plans will have little choice but to charge their consumers more. Enrollees in most states are expected to see an increase in their plans.
In Florida, premium rates and deductibles are expected to rise by an astounding $1,117 — second only to Mississippi, which will see a $1,445 increase. Overall, the average premium and deductible increase will be $225, with increases occurring in all but 10 states.
"The impending stiff, Obamacare-driven premium increases will be devastating to families throughout Florida,” U.S. Rep. Ron DeSantis (R-FL) told Florida Business Daily. “Obamacare proponents promised Floridians that they would save $2,500 per year on health insurance, but the reality has been much different as skyrocketing costs have strained family budgets. The big premium increases for 2017 may be indicative of an emerging Obamacare death spiral and is further evidence that the law has failed."
The timing of the premium rate increases couldn’t come at a worse time for Democrats. The annual enrolment in the Obamacare exchanges will open on Nov. 1 — one week before voters head to the polls to elect a new president.
Republicans have long warned of skyrocketing premiums due to the large number of older and less healthy enrollees Obamacare generally attracts.
The reinsurance program was established to help insurers offering ACA-compliant plans charge lower premiums and attract more enrollees as ACA took effect.
Before insurers set their 2014 premium rates, the Department of Health and Human Services (HHS) announced it would pay insurers 80 percent of the cost of claims incurred by enrollees between $60,000 and $250,000. As a result, insurers were able to reduce premiums by 10 percent in 2014, according to the Congressional Budget Office.
When fewer than expected enrollees signed up for health coverage in 2014, HHS agreed to pay insurers 100 percent of the cost of claims incurred by enrollees between $45,000 and $250,000. Insurers also received additional subsidies to make coverage more affordable for people.
Despite these benefits, many insurers have experienced devastating losses under Obamacare. The nation’s largest health insurance provider, UnitedHealth Group, announced last month that it can no longer afford to support Obamacare plans and will exit the majority of its health care exchanges in 34 states.
By law, insurers are required to sell policies equally to everyone, regardless of medical history, which has resulted in higher claims for insurers due to a less healthy pool of consumers.
Insurers rely on young and healthy enrollees to offset the medical costs of the less healthy. But higher premiums will make coverage less appealing to the enrollees insurers count on.
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